Correlation Between Lufax Holding and X Financial
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and X Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lufax Holding and X Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and X Financial Class, you can compare the effects of market volatilities on Lufax Holding and X Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lufax Holding with a short position of X Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and X Financial.
Diversification Opportunities for Lufax Holding and X Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lufax and XYF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and X Financial Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Financial Class and Lufax Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lufax Holding are associated (or correlated) with X Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Financial Class has no effect on the direction of Lufax Holding i.e., Lufax Holding and X Financial go up and down completely randomly.
Pair Corralation between Lufax Holding and X Financial
Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the X Financial. In addition to that, Lufax Holding is 1.58 times more volatile than X Financial Class. It trades about -0.23 of its total potential returns per unit of risk. X Financial Class is currently generating about -0.03 per unit of volatility. If you would invest 662.00 in X Financial Class on August 28, 2024 and sell it today you would lose (12.00) from holding X Financial Class or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lufax Holding vs. X Financial Class
Performance |
| Timeline |
| Lufax Holding |
| X Financial Class |
Lufax Holding and X Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and X Financial
The main advantage of trading using opposite Lufax Holding and X Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, X Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in X Financial will offset losses from the drop in X Financial's long position.| Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial Class |
| X Financial vs. Orix Corp Ads | X Financial vs. FirstCash | X Financial vs. Medallion Financial Corp | X Financial vs. Oportun Financial Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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